A string of box office duds dragged Walt Disney's film business down to a $313m (£182m) loss in the fourth quarter. The entertainment group chiefly blamed its Miramax division as it cleared out the production backlog put together by the Weinstein brothers, who have left to set up a new company. Poorly performing titles included The Brothers Grimm and The Great Raid. Losses were higher than the $250m to $300m expected in September.

Disney hopes for a change in fortunes with the recent release of its first home-generated computer animation feature Chicken Little and the first instalment of the Chronicles of Narnia, due for release next month. Chicken Little has so far taken $83m at the box office despite a lukewarm reception by critics. Another big hope is the summer release of the first of two sequels to Pirates of the Caribbean.

In a conference call late on Thursday, accompanying the release of the fourth quarter figures, chief executive Robert Iger said the company was focused on restoring its reputation in animation. It would be "trimming costs and managing budgets more closely".

Mr Iger said talks are continuing with Pixar, the studio behind films including Toy Story and The Incredibles, to renew the lucrative distribution deal that fell apart under his predecessor Michael Eisner. He declined to comment on Wall Street rumours that Disney might try to buy Pixar outright.

At group level, Disney said profits had fallen 26% to $379m. Its shares sank 83 cents to $25.16 in early Wall Street trade.

ABC, the television network, continued its dramatic turnaround with the hits Lost and Desperate Housewives generating strong international sales. As a result Disney's broadcasting division reported operating profits of $48m, compared with losses of $75m a year earlier.

Operating income at the cable division, which includes ESPN, reached $584m, up from $523m a year earlier. In the full fiscal year, Disney reported profits of $2.5bn, up from $2.3bn.